Benzinga | Dec 10, 2021 08:01AM EST

Alibaba Ramps Up Stake In Loss Making Tour Agency; Goes Cautious Amid Antitrust Action

* E-commerce giant Alibaba Group Holding Ltd (NYSE:BABA) invested 240 million yuan ($37.8 million) to double its stake in a loss-making local tour agency, SCMP reports.

* Subsidiary Alibaba (China) Technology Co will double its stake in Shenzhen-listed UTour Group Co from 5.02% to 11.06% by buying shares from Chair Feng Bin and Deputy Chair Guo Hongbin.

* At 4.41 yuan each, the price is half the 8.46 yuan per share that Alibaba paid for its initial 5% stake in the company in September 2020. Now Alibaba will be the second-largest shareholder after Feng.

* In 2018, Alibaba and its affiliates invested a record sum of 198 billion yuan in 117 deals.

* Contrastingly, in the first seven months of 2021, Alibaba -- excluding its affiliates invested 20.8 billion yuan in 22 deals.

* The deals included investments in community group buying start-up Nice Tuan and Chinese power bank rental firm Energy Monster and a $350 million investment in Turkish e-commerce firm Trendyol Group.

* Fourteen of Alibaba's investment projects had Alibaba as the sole investor. At the same time, half were considered "strategic" due to their long-term impact on its future development.

* Social media and gaming giant Tencent Holdings Ltd (OTC: TCEHY) completed 163 deals worth a combined 93.1 billion yuan in the first half of this year.

* The New York- and Hong Kong-listed company has been "cautious and conservative" in this year's investments, Qichacha said.

* "Alibaba tends either to let money flow to mature projects, investing huge amounts to gain more say in the projects; or it prefers to invest in projects that help it replicate the business that it was best at, especially overseas," said Xia Qiong, an analyst at Qichacha.

* The slower pace of external investments follows Alibaba's critical organizational changes amid antitrust probes in the past few months.

* Price Action: BABA shares traded lower by 0.21% at $124.17 in the premarket session on the last check Friday.